R. H. Herron Co. v. Westside Electric Co.

JAMES, J. This is an appeal taken by defendant Kern River Mining and Power Company from a judgment entered against it by default. Plaintiff instituted the action to recover against the Westside Electric Company various sums of money for merchandise sold by it and several other vendors whose claims were assigned to plaintiff prior to the commencement of the action. Judgment was sought against appellant upon its statutory liability as a holder of shares of stock of the Westside Electric Company. In the complaint it was alleged that appellant was a corporation organized and existing under the laws of the territory of Arizona and authorized by its articles of incorporation to subscribe for, own and hold stock in other corporations. It was not' alleged that appellant was doing business in the state of California at the time of the service of summons, or at all, or that it had a managing agent, cashier, or secretary within this state. The affidavit purporting to show service of summons recited that the person making the service had “on the twenty-ninth day of August, '1910, personally served summons in said action upon defendant Kern River Mining and Power Company, in said county of Los Angeles, state of California, by then and there delivering to and leaving with H. C. Shippe, an officer of said defendant, to wit, the president thereof, personally, another and separate copy of said summons annexed to another and separate copy of the complaint in said action.” Among other contentions made by appellant on this appeal, it is urged that the affidavit was insufficient to confer jurisdiction to enter the judgment. Section 411 of the Code of Civil Procedure provides how summons must be served in order that jurisdiction be acquired against a foreign corporation. Subdivision 2 of that section reads as follows: “2. If the suit is against a foreign corporation, or a nonresident joint stock company or association, doing business and having a managing or business agent, cashier, or secretary within this state; to such agent, cashier, or secretary.” It was not made to appear either in the complaint of plaintiff or the affidavit of the person making the service of summons that the appellant at the time such sum [780] mons was served upon its president, was engaged in any business in the state of California, or that it had in this state a managing or business agent, cashier, or secretary upon whom service of summons could be made. In Jameson v. Simonds Saw Co., 2 Cal. App. 582, [84 Pac. 289], where a like question was under consideration, the court said: “Under the provisions of this section, in order that the court may get jurisdiction over a foreign corporation, it is requisite that such corporation shall be ‘doing business’ within the state at the time the summons is served, and that the service shall be made upon its agent who is managing that business, or upon its cashier or secretary.” Even though it might here be said that because the appellant was at the time of the attempted service of summons the holder of a large number of shares of stock of the Westside Electric Company, a California corporation, it' was then “doing business” within the meaning of the section of the code referred to, still it does not by any means follow that the president of a foreign corporation who is served with process within this state shall be presumed to be the managing or business agent of such foreign corporation. In our opinion, the affidavit of service was insufficient to show that the requisite jurisdiction had been acquired to authorize the entry of the default judgment. The judgment is reversed. Allen, P. J., and Shaw, J., concurred. A petition for a rehearing of this cause was denied by the district court of appeal on May 31, 1912, and the following opinion then rendered thereon: